Security News: Former Vice Chancellor of City Colleges of Chicago Sentenced to More than Five Years in Federal Prison for Procurement Fraud

Source: United States Department of Justice News

CHICAGO — A former vice chancellor for City Colleges of Chicago has been sentenced to five and a half years in federal prison for devising and engaging in a procurement fraud scheme.

SHAROD GORDON was employed by City Colleges of Chicago in a variety of leadership roles, most recently as the Vice Chancellor of Legislative and Community Affairs.  From 2013 to 2017, Gordon obtained kickbacks from vendor-companies in exchange for steering them City Colleges contracts for community canvassing and flyer distribution services.  Some of the companies were formed by Gordon’s City Colleges colleagues and other friends for the sole purpose of applying for the contracts.  In some instances, the work was never performed – even though the companies submitted invoices that caused City Colleges to pay out nearly $350,000.  Upon receipt of the payments, Gordon directed representatives of the companies to give him a portion of the money.

Gordon, 47, of Oak Park, Ill., pleaded guilty last year to a federal wire fraud charge.  U.S. District Judge Robert M. Dow, Jr., on Wednesday imposed a 66-month prison sentence.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The Office of Inspector General for the City Colleges of Chicago provided substantial assistance in the investigation. 

“Sharod Gordon abused the public trust for personal profit,” Assistant U.S. Attorney Megan DeMarco argued in the government’s sentencing memorandum.  “Defendant used his government position to deprive underserved college students of honest services in order to line his own pocket.”

Seven other defendants were charged with participating in the fraud scheme.

Security News: United States Settles $1.66 Million Healthcare Fraud Claim Against Iowa Dermatologist

Source: United States Department of Justice News

DES MOINES, IA – Eastern Iowa Dermatology, PLC, located in Bettendorf, and Dr. Manish Kumar have agreed to pay $1.66 million to resolve allegations for violations of the False Claims Act by submitting false claims to Medicare for dermatology office visits and the destruction or removal of skin tags and lesions. The False Claims Act considers “up-coding”—the practice of exaggerating the amount or complexity of medical services rendered in order to achieve a higher level of reimbursement—a form a fraud.

Dr. Kumar and Eastern Iowa Dermatology, PLC also agreed to an Integrity Agreement and will submit to ongoing monitoring by the U.S. Department of Health and Human Services.

“Health care providers that try to boost their profits by submitting fraudulent claims to Federal health care programs threaten the integrity of those programs and drive up prices for everyone,” said Tamala E. Miles, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General. “We work tirelessly alongside our law enforcement partners to protect the integrity of Federal health care programs and to ensure the appropriate use of taxpayer dollars.”

The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Southern District of Iowa and the U.S. Department of Health and Human Services Office of Inspector General.

Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477). False Claims Act cases can also be brought under the qui tam provisions of the Act, which encourage whistleblowers to bring suit on behalf of the United States and share in any financial recovery.

United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was handled by Assistant U.S. Attorney David Faith and Investigative Analyst Connie Benton.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Security News: Michigan Man Arrested for International Computer Fraud Scheme and Distribution of Opioids and Other Illegal Drugs

Source: United States Department of Justice News

BOSTON – A Michigan man was arrested today in connection with a complex multi-year scheme to defraud computer users and to sell controlled substances online.

Doyal Kalita, 35, of Redford, Mich., was indicted on one count of wire fraud conspiracy, one count of conspiracy to import Schedule II and Schedule IV controlled substances and one count of money laundering conspiracy. Kalita will make an initial appearance in federal court in the Eastern District of Michigan today. He will appear in federal court in Boston at a later date.

“Taking advantage of innocent people through the assumed anonymity that the internet provides is a cowardly crime. We believe that Mr. Kalita ran an online criminal enterprise that not only targeted and deceived innocent online users out of their own money, but also pumped deadly opioids into our communities,” said United State Attorney Rachael S. Rollins. “Bad actors think they can remain undetected from law enforcement while behind a computer screen. They should think again. We have the tools to identify you and bring your criminal activity to a halt. And we will use them.”

“Tech support scams cost Massachusetts residents $5.3 million last year, and consumers, nationwide, lost $347 million. The FBI is working hard every day to hold the criminals behind these scams accountable for the harm they inflict, and today, we arrested Doyal Kalita for his alleged role in a multi-year, international scheme to defraud computer users, and, for his role in a side business selling imported drugs online,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s arrest should be a warning to others that the FBI will continue to work with our law enforcement partners to root out fraudsters who victimize our fellow citizens for personal gain.”

“The defendant and others allegedly operated a variety store of online scams. First, they are alleged to have devised a complex help-desk scam to defraud innocent individuals who were simply trying to resolve phony computer problems. In addition, they are also accused of operating an online drug distribution scheme that sold controlled substances,” said Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division, Boston Office. “As a result of today’s charges, their scams are no longer in operation, and they will now be held responsible for their alleged fraud and deceit.”

According to the indictment, in 2015, Kalita and a co-conspirator started a scheme to defraud internet users through the use of deceptive pop-up screens that falsely told victims that their computers were infected with viruses (or were otherwise damaged) and directed the victims to call for technical support. In fact, the victims were connected to Kalita and his co-conspirator’s call centers in India and in Michigan and were scared or deceived into buying products and services that they did not need. It is further alleged that, contemporaneously with the fraud scheme, Kalita and his co-conspirator launched an online drug distribution scheme that sold controlled substances, including opioids, and shipped the drugs from India and Europe to persons in Massachusetts and elsewhere in the United States. It is alleged that another individual later joined the conspiracy as one of Kalita’s principal drug suppliers.

The charge of wire fraud conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss, whichever is greater. The charge of money laundering conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the laundered funds, whichever is greater. The charge of conspiracy to import controlled substances provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $1 million or twice the gain or loss, whichever is greater. The charges of drug distribution and conspiracy to distribute drugs each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of $1 million or twice the gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

U.S. Attorney Rollins, FBI SAC Bonavolonta and IRS SAC Simpson made the announcement today. The United States Marshals Service in Boston provided valuable assistance in the investigation. Assistant U.S. Attorney Kriss Basil of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case.

The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Security News: Jail Corrections Officer, Wife Indicted on Additional Child Pornography Charges

Source: United States Department of Justice News

JEFFERSON CITY, Mo. – A corrections officer at the Jefferson City Correctional Center and his wife have been indicted by a federal grand jury on additional charges related to video recording their sexual assault of a child victim and other child pornography offenses.

Paul Emerson Schofield, 33, and his wife, Sara Ellen Schofield, 29, both of Jefferson City, were charged in a 12-count indictment returned by a federal grand jury in Jefferson City on Wednesday, Aug. 3. The federal indictment replaces two separate criminal complaints against the defendants, which charged each of them with using a minor to produce child pornography. The Schofields have been in federal custody without bond since their arrest on July 13, 2022.

The federal indictment alleges that Paul and Sara Schofield participated in a conspiracy to produce child pornography over a nearly three-year period from July 29, 2019, to June 7, 2022. A child victim under the age of 12 allegedly was used to produce child pornography. In addition to the conspiracy, Paul Schofield is charged with four counts of producing child pornography and Sara Schofield is charged with two counts of producing child pornography.

Paul Schofield is also charged with one count of advertising child pornography, one count of receiving child pornography, one count of distributing child pornography, and one count of transporting child pornography.

Sara Schofield is also charged with one count of transferring obscene material to a minor.

According to an affidavit filed in support of the original criminal complaints, the investigation began when law enforcement received a CyberTip from the National Center for Missing and Exploited Children on April 25, 2022. Kik, a free online social media platform, reported that a user later identified as Paul Schofield had uploaded multiple videos of child sexual exploitation material.

Law enforcement officers executed a search warrant at the Schofield’s residence on June 7, 2022. A forensic examiner conducted a preview of Paul Schofield’s cell phone and located several videos of child pornography, including infants engaged in sexual contact with adults. Examiners later found videos on the phone of both Paul and Sara Schofield sexually assaulting an unconscious 4-year-old victim.

On June 9, 2022, law enforcement officers executed another search warrant at the Schofield’s residence. Officers seized Sara Schofield’s cell phone, which contained another sexually explicit video of the same 4-year-old victim in which the voices of Paul and Sara Schofield can be heard.

The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Ashley Turner. It was investigated by the Boone County, Mo., Sheriff’s Office Cyber Crimes Task Force and the FBI.

Project Safe Childhood

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”

Security News: ST. CROIX FELON PLEADS GUILTY TO HOME INVASION AND CARJACKING

Source: United States Department of Justice News

St. Croix, VI – U.S. Attorney Delia L. Smith announced today that Luis Davis, 34, of St. Croix, pleaded guilty in District Court before Magistrate Judge Emile A. Henderson, III, to Using a Firearm During a Violent Crime, Carjacking, and Felon in Possession of a Firearm. The sentencing in this matter is scheduled for December 2, 2022, where Davis faces, a maximum of 15 years of incarceration on the carjacking, a maximum of 10 years on the felon in possession, and a mandatory minimum of seven years on the firearm possession during a violent crime. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

According to court documents, on September 10, 2017, Davis, along with two co-defendants, broke into a home in Estate Rust Op Twist while brandishing a firearm. Davis and is co-defendants physically assaulted an occupant of the home by punching him in the head and threatened to kill another occupant while demanding money. Davis and his co-defendants then forced the occupants, at gunpoint, into the rear passenger seat of their Toyota Tacoma truck and drove to the shoreline location where the male occupant had left his wallet. After retrieving the wallet, Davis and his codefendants fled in the Toyota Tacoma truck and a Jeep Wrangler. In addition to the vehicles, Davis and his co-defendants stole $200.00 cash, two iPhones valued at $600 each and an iPad valued at $200.00. In 2011, Davis was convicted of Felony Assault in the First Degree in the Superior Court of the Virgin Islands.

This case was investigated by the Virgin Islands Police Department and the Federal Bureau of Investigations and was prosecuted by Assistant U.S. Attorney Daniel H. Huston. The investigation is part of the Department of Justice’s Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is a nationwide initiative that brings together federal, state, local and tribal law enforcement officials, prosecutors, and community leaders to identify the most pressing violent crime problems in a community and develop comprehensive solutions to address them. For more information on the Department of Justice’s Project Safe Neighborhoods, please see: https://www.justice.gov/psn.

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